April 10, 2018 – Across the board, in every industry, today’s candidate-driven market is fueled by growing demand for top talent against a landscape of short supply. What led to this tight marketplace is explained in a new report by executive search firm Slayton Search Partners, which also offers suggestions to help companies attract the best talent.
“It’s almost as if we’ve turned the clock back to before the recession of 2008,” said Richard Slayton, managing partner and CEO of Slayton Search and author of the report. “For years since, employees were just thankful for a job at a time when companies everywhere were cutting back, downsizing and declaring bankruptcy. But with economic recovery comes soaring demand, and candidates across every function and industry once again hold a high degree of power in the hiring process.”
Recruiting executive leaders in this tight labor market, he noted, is just as difficult as seeking frontline employees. “High competition for top talent puts candidates in the driver’s seat.”
Candidate-Driven Executive Market
With the unemployment rate at just 4.1 percent, it’s easy to see that supply and demand is powering the candidate-driven market. “Certainly, job applicants can sense the competition for their skills,” said the report. “Many are receiving multiple employment offers in a single job search, and others are seeing high success in their efforts to counteroffer potential employers.”
A big reason for the shortage of talent is that the large majority of Baby Boomers are now officially retired. “This challenge alone leads to the topic of training the next generation and preparing Millennials for executive leadership roles,” said Mr. Slayton. “But it doesn’t stop there. The challenge of supply and demand only grazes the surface of the problem.”
A deeper issue is that organizations everywhere are facing major transformation in the face of digitalization, said the Slayton report. Technical capabilities change the way business is done, overhauling processes and deepening strategies. “Today’s leadership teams must have the capacity to understand how this disruption impacts their company in both positive and negative ways,” said the study. “They need the right balance of technical skills and soft skills to implement and communicate change. Cross-functional skills are essential, and a diverse background is highly valuable.”
Finding candidates with those qualities is extremely challenging. Whether they’re taking the helm as CEO or leading the way in technology, strategy, HR, sales, finance or something else entirely, such leaders are in high demand.
So how do businesses attract top-flight executives in a candidate-driven market? The search firm offered these five key tips in its report:
1. Building an Attractive Culture
The best executives, the ones who can truly make a positive impact on your organization, are drawn by opportunity. Building a reputation as a company that takes care of its employees, from the C-level to the ground level, is a big deal, said the report. So is innovation, transparency, and employee development. If you can’t prove that your company prioritizes cultural fit, many candidates will be quick to dismiss the opportunity.
The Idea of Cultural Fit Might Be More Myth Than Reality
Human resources executives and recruiters have been using the term “cultural fit” – generally defined as the ability of an employee to fit with the core beliefs, attitudes and behaviors that make up an organization – for a decade or two.
“Whether they’re making a lateral or vertical move, senior executives want to know how this position will impact their career,” said Mr. Slayton. “Who will they be working with, what major projects and initiatives are planned, what are the business objectives, and what challenges will they face? Furthermore, what does the work-life balance look like, how far is the commute, and what does the future look like with this organization?”
Employer branding is critical, said the report, and so are the company’s retention efforts, as both will impact its reputation and corporate culture. Are you creating a sense of community and purpose? Do you provide flexibility, training, and career growth? Do you elicit and act upon feedback from your employees? Are these qualities reflected in your branding initiatives? At the end of the day, if you want to attract the best executive talent, you need to deliver the best opportunity.
2. Offering Competitive Packages
Culture, innovation, and impact are all important factors behind attracting executive talent in a candidate-driven market, but compensation is the decisive element, said Mr. Slayton. An innovative executive leader who can drive your organization is someone who has built a career upon highly valuable learning experiences. They’ve worked hard to get where they are, and they know that their addition to any leadership team is an investment.
Accordingly, organizations must stay competitive in their compensation structures. “This requires due diligence in market research,” said Mr. Slayton. “In a candidate-driven market, you must know what your local and national competitors are paying. You should also be aware of regional cost-of-living, especially if you’re considering relocating a candidate. For every executive position you’re looking to fill, you need to run an evaluation on base pay, annual performance bonuses, retention incentive bonuses, stock options, retirement plans and contributions, health and life insurance benefits, and miscellaneous perks. If your total package doesn’t live up to market standards, you’re going to lose out on the best executive candidates.”
3. Implementing an Efficient Hiring Process
Hiring senior executives can be a long process. Your candidate’s job search is likely confidential, which means you should plan interviews with consideration of their demanding schedules. If the individual must be relocated, you also need to organize housing visits. “There will probably be several interviews with different leaders and stakeholders,” said Mr. Slayton. “And don’t forget about getting buy-in from the board. Rush the process and you risk making the wrong decision, which could have a detrimental impact on your organization.”
Big Challenges Ahead for Recruiting and Talent Sector
Across many parts of the globe, 2018 has started with a job market as robust as any in recent years. It’s been so strong that recruiters are being forced to get creative in order to fill all the position mandates coming their way. And they’re not the only ones.
If the recruitment process is too long, however, that candidate will no doubt be seated in a brand-new job before you even get a chance to extend an offer. “That’s simply the reality of a candidate-driven market,” said Mr. Slayton. “Your hiring process must be highly efficient, streamlining the interview schedule, getting buy-in as early as possible, and communicating with the candidate every step of the way. A refined, consistent recruitment strategy is key, and if your organization is out of practice – due to internal promotion or low turnover – then it might be more effective to partner with an executive search firm that’s well established in your industry.”
4. Broadening Your Talent Pool
Even with an attractive opportunity, competitive compensation, and efficient hiring processes, you may be challenged with a short supply of candidates whose attention is elsewhere, according to multiple reports. It’s a dilemma that requires some creativity. If the hiring profile for the executive position you’re trying to fill has largely been traditional, said the report, it might be time to start looking at more diverse backgrounds or cross-functional skill-sets.
“Furthermore, an honest evaluation of the diversity of your talent pool is vital,” said Mr. Slayton. “Do your candidates cover a broad range of backgrounds, ages, cultures, ethnicities, and gender? This has become an important factor to consider in today’s workforce, with some companies even establishing the role of chief diversity officer. Diversity in the C-suite often allows for creative problem-solving, new perspectives and greater initiative. In a candidate-driven marketplace, a commitment to diversity presents an attractive opportunity.”
5. Navigating Executive Hiring in a Candidate-Driven Market
More than merely a buzzword, the candidate-driven market has become a very real obstacle for companies looking to hire top talent. “Because executive candidates are usually passive jobseekers, often happily employed at competitors, the challenge of hiring for the C-suite is even greater,” Mr. Slayton said. “Effective employer branding, competitive rates, streamlined hiring processes and a diverse talent pool are key practices to overcoming these potential barriers.”
Mr. Slayton has conducted over 600 executive search assignments for presidents/chief executive officers/general managers, chief marketing officers, chief human resource officers, chief supply chain officers, chief research & development officers, chief customer officers and chief financial officers. In 2008, he was named one of the World’s 100 Most Influential Recruiters by Businessweek.
Related: What Workers Want May Surprise You
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Will Schatz, Managing Editor – Hunt Scanlon Media